89 Cal. App. 2d 427 | Cal. Ct. App. | 1948
This is an action to rescind an agreement to sublease certain premises, and to recover the consideration paid. The plaintiff alleged, and the court found, that plaintiff had entered into the agreement as the result of fraudulent misrepresentations on the part of defendant and his agent. Judgment was entered in favor of plaintiff, and defendant appeals from the judgment.
Appellant contends that the evidence was insufficient to support findings by the trial court: that there was fraud on the part of defendant; that the lease and sublease were terminated; and that the cause of action was not barred.by laches. He also contends that plaintiff should have given a notice of rescission, and should have made an offer of restoration, prior to the commencement of this action; and that plaintiff waived his right to rescind.
Defendant was in the business of operating automobile parking lots in Los Angeles. He had conducted such a business for a number of years at 749 Maple Avenue, which premises he occupied at times under a written lease and at times under a month-to-month tenancy. In 1945, he sublet the premises to another person on a month-to-month basis. The subtenant conducted the parking lot business, and paid defendant a monthly rental in the same amount as defendant was paying the owner of the property. In August, 1945, at which time
Plaintiff testified that the first time he went to see Mr. ICrenn he asked him if the advertisement was right as to the lease being for three years and that Mr. Krenn answered “Yes”; that the second time he went to see him, when he paid the deposit of $1,500, Mr. Krenn told him he “would
Plaintiff’s brother-in-law, called as a witness on behalf of plaintiff, testified that he accompanied plaintiff to the office of defendant at the time he signed the sublease; that defendant, told plaintiff that he had already signed ‘ ‘ some papers, ’ ’ and given a down payment and he “had nothing to Avorry about, that he would have a 3-year lease”; and that defendant told plaintiff the property was not for sale and was not going to be sold.
An executive of The Huntington Land and Improvement Company, called as a Avitness on behalf of plaintiff, testified that the property here involved had been listed for sale “from time to time”—first with one agent and then with another; and that it was “definitely” listed for sale during “the entire year” of 1945.
Mr. Krenn, called on behalf of plaintiff, testified that at the time plaintiff came to his office and inquired about the advertisement, the witness did not have, and had not seen, the original lease or the sublease; that he told plaintiff 1 ‘ There is a 3-year lease on this lot and that he would be able to read the lease” and see exactly what was in it.
Plaintiff’s counsel testified that plaintiff first called upon him the latter part of March or the first part of April, 1946; that he did not “recall” that plaintiff brought any papers with him at that time, but he later brought the two letters which had been -written to defendant by The Huntington Land and Improvement Company.
Defendant testified that he operates “several properties” in Los Angeles as parking lots, and has been in that business about 16 years; that during that time he had sold and bought several parking lots; that after the lease was entered into, the person who had been operating the parking lot on a month'-to-month basis began operating it on a “day-by-day basis”; that he was supposed to pay defendant $9.00 a day, and at the end of the month defendant “would probably get” $225.
Mr. Krenn, also called on behalf of defendant, testified that he told plaintiff and plaintiff’s brother-in-law that the possibility of a “sale or anything happening to the lease” was remote.
Appellant contends, as above stated, that the evidence was insufficient to support a finding of fraud on the part of defendant. As to the issue of fraud the court found, among other things, that defendant’s agent had falsely represented to plaintiff that the defendant would give him a lease or sublease on the premises “for an indefeasible 3-year period”; that defendant had falsely represented to plaintiff that the property was not for sale; that they made such representations as positive statements and in a manner not warranted by the
Appellant argues that plaintiff was negligent in failing to investigate and ascertain the truth. The truth of the representation that the property was not for sale could have been ascertained accurately only by communicating with the owner of the property. The trial court found that defendant prevented plaintiff from knowing the identity of the owner of the land. That finding is supported by plaintiff’s testimony that he did not see the lease, and his testimony that he asked defendant for the name of the owner of the property and that defendant told him he would be dealing with the defendant and there would be no reason for him to see the owner. Furthermore, had the means of knowledge been open to plaintiff, his failure to investigate would not necessarily have precluded him from relief. It is only “when the circumstances are of such a character that inquiry becomes a duty is the failure to make it a negligent omission. ’ ’ (Anderson v. Thacher, 76 Cal.App.2d 50, 71 [172 P.2d 533]; see also Carpenter v. Hamilton, 18 Cal.App.2d 69, 71 [62 P.2d 1397].) The evidence was sufficient to support the findings, above mentioned, regarding fraud.
Appellant also contends that the evidence was not sufficient to support a finding by the trial court to the effect that the lease and sublease had been terminated. He argues, in effect, that the notice of termination was not effective, since The Huntington Land and Improvement Company was not the lessor at the time it gave the notice—it having sold the property before the notice was served. An executive of The Huntington Land and Improvement Company testified that he signed the notice, which was dated January 7, 1946, and mailed it to the escrow holder to be served on defendant at the time the escrow was completed. It is unnecessary, however, to determine the sufficiency of that notice since there was evidence to support the trial court’s finding that the defendant “accepted and acquiesced in” the termination of the lease and “abandoned and surrendered any interest” he had in the premises. Defendant, in his answer, alleged that when the plaintiff notified him that he had entered into a lease with the purchaser of the property, the “defendant acquiesced in said arrangement and abandoned and released and cancelled his said lease with The Huntington Land &
Appellant asserts that the plaintiff, prior to commencing this action, should have made an offer to restore the benefits received under the sublease. As a general rule it is necessary for a party attempting to rescind a contract to restore, or offer to restore, the benefits received as a condition precedent to bringing the action. If there is nothing to restore, however, such offer is not required. (California etc. Co. v. Schiappa-Pietra, 151 Cal. 732, 739 [91 P. 593].) The plaintiff did not receive anything under the contract to restore to defendant. Appellant argues, in effect, that plaintiff should have restored possession of the premises to him. As above shown, defendant’s lease had been terminated and he had no further interest in, or right to possession of, the premises under his sublease with defendant but, after March, 1946, was in possession under another agreement with the new owner and at a greatly increased rental—$400 a month instead of $225. An offer to restore on the part of plaintiff would obviously have been an idle act. The only benefit plaintiff received under the sublease was the use and occupancy of the premises for a period of about three months, and for which time he paid defendant the agreed rental. Plaintiff therefore was unable to return that which he received under the sublease. Under such circumstances the element of restoration is not a legal requirement. In the case of Rosemead Co. v. Shipley Co., 207 Cal. 414 [278 P. 1038], the court,
Appellant also contends, in effect, that plaintiff waived his right to rescind by remaining in possession of the premises, and enjoying the good will of the business after he had learned the facts constituting the alleged fraud. It was stated in Neet v. Holmes, 25 Cal.2d 447 [154 P.2d 854], at page 458, that the right to rescind “is waived by recognition of the existence of the contract after the right to rescind was created. ” The question as to whether a party’s acts and declarations show an intent to waive the asserted fraud in procuring execution of a contract is one of fact for the trial court. (Schied v. Bodinson Mfg. Co., 79 Cal.App.2d 134, 143 [179 P.2d 380]; see also Heller v. Melliday, 60 Cal.App.2d 689, 695 [141 P.2d 447].) Appellant’s argument is apparently based upon the theory that plaintiff remained in possession of the premises until July 30, 1946, by virtue of the sublease; in other words, that a landlord-tenant relationship existed between them until plaintiff vacated the premises. There is no merit in that argument. It is true, as asserted by appellant, that plaintiff entered into possession of the premises under the sublease, but there is no evidence, other than plaintiff paying the rent to defendant for February, that plaintiff, by any act or declaration, recognized the existence of the contract with defendant after learning of the sale of the property. Upon learning of said sale he immediately went to defendant and told him the sublease was no good and he wanted his money back. Thereafter he entered into an oral agreement directly with Hammerman by which he was given an indefinite term on a month-to-month basis and at an increased rental. Plaintiff notified defendant that
Appellant’s further contention that the evidence was insufficient to support the trial court’s finding that plaintiff’s right of rescission was not barred by reason of laches is not sustainable. Section 1691 of the Civil Code requires that a party “must rescind promptly, upon discovering the facts which entitle him to rescind, if he ... is aware of his right to rescind. ...” Just how long plaintiff delayed in commencing the action after becoming aware of his right to rescind is not clear, but it was not longer than five months. The doctrine of laches does not rest entirely upon lapse of time, and it does not require any specified period of delay. (Neet v. Holmes, supra, p. 460.) Whether a defrauded party has rescinded “promptly” depends upon all the circumstances of the particular case. (Noll v. Baida, 202 Cal. 98, 109 [259 P. 433].) It does not appear, in the present case, that the defendant suffered any injury on account of plaintiff’s delay. As stated in Curtis v. Title Guarantee etc. Co., 3 Cal.
The judgment is affirmed.
Shinn, P. J., and Vallée, J., concurred.
A petition for a rehearing was denied January 25, 1949, and appellant's petition for a hearing by the Supreme Court was denied February 24, 1949. Schauer, J., and Spence, J., voted for a hearing.